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Economic governance

Economic governance

Economic governance

Fundamentals first

Fulfilment of the economic criteria is a key requirement for EU membership, as set out in the Copenhagen criteria. It implies a functioning market economy is in place that has the capacity to withstand competitive pressure inside the EU single market. The European Commission gives an overview of each country's readiness and progress in the fulfilment of the economic criteria every year. For more details see our latest strategy paper and country progress reports.

Economic governance is the system by which government institutions, including independent actors like the central bank, regulate and steer the economy. The fundamentals first approach to EU enlargement encourages aspiring members to tackle economic fundamentals first: macroeconomic stability, a welcoming business environment, functioning labour and financial markets, good levels and quality of education, infrastructure, innovation and economic integration with the EU and the world.

The EU strengthened its economic governance exercise with the enlargement countries in 2015 to prepare them for their eventual participation in the European Semester.

Economic Reform Programmes

As of 2015, all candidate countries and potential candidates submit annual Economic Reform Programmes (ERP) to the European Commission. They are an expanded version of the previous Pre-Accession Economic Programmes for candidate countries. The ERPs contain medium-term macroeconomic projections (including for GDP growth, inflation, trade balance and capital flows), budgetary plans for the next three years and a structural reform agenda. The structural reform agenda includes reforms to boost competitiveness and improve conditions for inclusive growth and job creation in the following areas:

Energy and transport markets

Sectoral development

Business environment and reduction of the informal economy

Research, development and innovation and the digital economy

Trade-related reform

Education and skills

Employment and labour markets

Social inclusion, poverty reduction and equal opportunities

The European Commission and the European Central Bank (ECB) both make assessments of the ERPs that are submitted to the Council of Ministers for direct discussions with the enlargement countries.

Economic and Financial multilateral dialogue

All seven enlargement countries participate in a multilateral dialogue meeting with the Ministers of Finance of the EU Member States, the EU and the ECB on an annual basis. The participants adopt Joint Conclusions with country-specific policy guidance for each of the countries outlining economic policy priorities for the coming 12 months. The policy guidance passes through preparatory multilateral discussions in the Council of Ministers over the course of a month. These discussions occur in parallel in the Economic Policy Committee, the Employment Committee and the Economic and Financial Committee. The Commission and ECB assessments of the Economic Reform Programmes (see above) form the basis for these discussions.